Tuesday, March 29, 2011

Palmed Off

Or can I have my chocolate cake and coffee and consume them to?

The figure below was compiled from FAO statistics and shows the area planted to four everyday food commodity crops. Food crop here means only that these crops are ingested by humans as two of them have no calorific value whatsoever. And while cocoa oil can act as a “food” it is a non essential entertainment food (i.e. luxury) consumed mainly in rich countries – with much of the calories being made up from sugar and other sources of fat (animal) or palm oil.

Palmed Off

The point of posting this graph is to demonstrate firstly, the rapid growth in area planted to palm oil. But that is a frequent topic on energy blogs anyway.

What also interested me was the fact that the area planted to palm oil only exceeded that planted to coffee in 2000: something I have never heard reported or discussed. It surpassed cocoa in about 1985.  In fact in all the talk of the environmental destruction of oil palms there is never any mention of the historical (often colonial era) destruction as a result of coffee, chocolate and tea. Using area as our statistic the environmental destruction due to coffee and cocoa still exceeds that of oil palms.

Tuesday, March 22, 2011

Nuclear Shake Ups

A few quick articles before I go off and do something more productive.

Some newer articles added at end and then we need a change of topic.

Germany Plans Reunification-Style Speed to Build Grids for Cleaner Energy

Bloomberg, March 21

Germany may accelerate power-line projects to transmit more renewable energy to consumers after Japan’s nuclear disaster rattled voters in Europe’s biggest electricity market.

The Economy Ministry is preparing to use fast-track powers last exercised in 1990 when a newly united Germany had to build transportation infrastructure as fast as possible to replace crumbling roads in the east and improve connections in the country, according to a ministry document obtained by Bloomberg News. Control over power grids would be taken by Chancellor Angela Merkel’s government from states and local councils.

“The scale of the challenge is comparable with infrastructure needs after reunification,” according to the document, an outline for a draft to be presented to the cabinet in two days. Power storage sites will be exempted from paying grid fees for 20 years rather than the current 10.

Merkel last year agreed to extend the life of Germany’s nuclear reactors in return for receiving 15 billion euros from their owners to help build the grids. The plan also commits the four main utilities to pay a nuclear tax from this year through 2016 of 2.3 billion euros annually.

Another 5 billion euros was earmarked for offshore wind parks. The steps cumulatively aim to speed Germany’s target of generating 80 percent of energy from renewable means by 2050.

The US and Australia have similar geo-political attributes.

The Political Demise of Nuclear Power in the U.S

Huffington Post, March 21

While there may be good reasons for nuclear power to be used as a bridge fuel to a renewable energy future, I am confident that nuclear power is politically dead in the United States. This makes the research and development of alternative energy and carbon capture and storage that much more important and urgent. It also means that environmentalists who have either reluctantly or enthusiastically embraced nuclear power as a form of carbon free energy should move on to other solutions. The catastrophe in Japan will not soon be forgotten, and it will shape the politics of nuclear power plant siting for decades.

This analysis is based on a few fundamental facts of American political structure. Despite the strength of our national government, this remains a federal system of divided power. States retain sovereignty, and we have a deeply rooted tradition of local control of land use. Our national elected leaders pay a great deal of attention to geography and to opinion leaders at the community level.

The "Not-in-my Backyard" (NIMBY) syndrome is not a passing fad in American politics; it is a central element of land use politics in communities throughout this country. While it is true that the definition of a noxious facility varies from place to place, no one doubts the ability of an American locality to veto a land use they do not like.

The images of earthquake and tsunami damage will be combined with the nuclear accident and form a single image in the public's mindset about nuclear power.

And in a country that has trouble maintaining roads (at least where I am) never mind the drainage system…

Courting Chernobyl in Ring of Fire Is Lunacy: William Pesek

Bloomberg, 20 March

Here a word for Indonesia as it mulls a nuclear future: Don’t!

Sunday, March 20, 2011

N is for Nuclear, N is for Nitrogen

Updated at end

In the wake of the disaster at Fukushima, Japan is faced with an immediate short term energy deficit, which may become a long term energy problem should public sentiment force the Government to reconsider its current nuclear program. One immediate solution appears to be a rapid increase in the use of LNG.

LNG prices may rise by $5

Indian Express, Mar 19 2011

As Japan does not have reserves of gas and crude oil, it imports more than 80% of its energy requirements.

It is expected that 60% of the shutdown power capacities will be substituted with coal-based capacities, while LNG-based capacities will make up for the rest. The 40% substitution with gas-based capacities to boost the gas demand by 6 to 8 million tonne per annum which represents around 11% of the total global spot LNG trade in 2009. This would in addition to Japan’s substantial LNG imports of 63.9 MTPA, which account for 35% of total LNG trade during 2009.

RI ready to add LNG supply to Japan 

The Jakarta Post, /15/2011

BPMigas spokesman Gde Pradnyana said on Monday that Japan might turn to Indonesia to meet the surge in the country’s gas needs to generate electricity to compensate for the decline in the power supply from nuclear reactors.

He said that 20 cargoes of LNG from the Bontang Plant in East Kalimantan were still available for sale. At present, Japan is one of the main buyers of LNG produced at the Bontang Plant.

Tokyo Electric Power Corp. and other Japanese utilities may increase outputs of gas, oil and coal-fired power plants to replace production from the 11 nuclear reactors closed last week following the 8.9-magnitude earthquake that hit on Friday. About 30 percent of Japan’s power supply comes from 54 nuclear reactors.

Japan lost around 25 percent of its power supply following the disaster. As the crude oil price is more expensive now, it will buy more gas to generate electricity,” he said, adding that the recovery of the nuclear plant was predicted to take a long time.

Indonesia is the world’s second largest LNG producer with most of its production coming from three plants — the Arun Plant in Aceh, Bontang Plant in East Kalimantan and Tangguh Plant in Papua.

Torbjoern Kjus, oil market analyst at Oslo-based bank DnB NOR, said “The immediate direct effect on incremental oil demand for power generation will probably be about 150,000-200,000 barrels a day,” consisting of light-sweet crude for direct burning and low-sulfur fuel oil, assuming the grid is still able to distribute power.

LNG prices jump after disaster

FT.com, March 14 2011

Natural gas prices have jumped as dealers are braced for Japan to step up its purchases to replace the large amounts of nuclear power capacity knocked out by Friday’s earthquake and tsunami.

Japan is the world’s largest buyer of liquefied natural gas, a form of super-cooled gas shipped in tankers from exporters such as Qatar and Algeria. Any abrupt change in its energy demand could therefore affect commodities markets.

The earthquake has shut down 9,700 megawatts of nuclear capacity, equivalent to about a fifth of the country’s total capacity. Analysts expect that Japanese utilities will scramble for crude, thermal coal and LNG as replacements. They fear that Tokyo may close more atomic reactors for inspections in coming months.

The cost of UK natural gas for delivery in a month, seen as an indicator of LNG as Britain is a large importer of super-cooled gas, rose on Monday by as much as 7.7 per cent, extending its gains since the earthquake to 12 per cent.

The contract traded as high as 64.5 pence per therm, a two-year high.

The other stop gap is of course our old friend coal. The Australian has an unusually (even by its standards) scathing attack on the situation in Japan. But then The Oz loves coal.

Tuesday, March 15, 2011

It could have been worse!

Amid the tragedy of the Japanese earthquake and tsunami, another tragic drama continues to unfold.

Updated at end - it is worse

In a nut shell, the phrase “it could have been worse” seems to be the defense adopted (in the press at least) by those still willing to defend the almost certainly critically tarnished PR sheen of nuclear power. Yes, it is remarkable that the six reactors located on the coastline facing a geologically active tectonic plate survived the initial earthquake and impact – and it was probably lucky that three of them were temporarily shut down prior to the event for maintenance. But this does not “prove” the inherent safety of the technology. It does prove that concrete of sufficient thickness and mass does not get washed away by a 5-7 meter tsunami.

The Sydney Morning Herald has a useful graphic.

The ever ready Ziggy (Neutron) Switkowski hit the press early:

Threat from meltdown only minor: Ziggy Switkowski (13th)

The impact of any meltdown in Japanese nuclear reactors damaged by the recent earthquake will be small compared to the devastation caused by the quake itself and the subsequent tsunami, Australia's best-known nuclear power expert says.

Talk about shifting the Overton Window

"The contribution, if any, to this [disaster] from the nuclear fleet, I expect even under worst case scenarios is going to be small," he told Fairfax Radio Network today.

"That's not to deny that people are always concerned and justly concerned about the integrity of the nuclear reactor network," Dr Switkowski said.

"The Japanese reactors are probably as good as you can find around the world, but this magnitude 9 earthquake may well have tested the limits of their design."

"It could then over time just settle in and the reactor would be irreversibly damaged, or if there was an explosion - and it would be a chemical explosion, nuclear reactors can't have atomic explosions - then there would be both physical damage and the release of radiation."

The risk of an uncontrolled loss of containment of the core, releasing large amounts of radiation, was very, very small, and the radiation would probably not spread very far, he said.

Noting that people had been evacuated from a 20-kilometre exclusion zone around the reactors, he said, "I would think that the possibility that there would be significant build-up of radiation outside the zone would still remain low."

And the next day…

Japan nuclear health risks low, won't blow abroad, experts say (14th)

Health risks from Japan's quake-hit nuclear power reactors seem fairly low and winds are likely to carry any contamination out to the Pacific without threatening other nations, experts say.

"But there are obviously serious concerns about ensuring that the core of one of these reactors where the cooling isn't working remains under control and does not melt and does not create radiation leaks."

Describing this as the worst case scenario, he said the melting would effectively destroy the core of the reactor.

"It could then over time just settle in and the reactor would be irreversibly damaged, or if there was an explosion - and it would be a chemical explosion, nuclear reactors can't have atomic explosions - then there would be both physical damage and the release of radiation."

And the next day…

Ziggy predicts nuclear Australia (15th)

The immediate past chairman of the Australian Nuclear Science and Technology Organisation said he anticipated Australians would be apprehensive about adopting nuclear power after the unfolding crisis in Japan but he believed Australia would eventually use it as an energy source.

"I remain convinced that in our future we will see nuclear power," he said on ABC-TV last night.

"We do need clean energy, we are an energy-hungry nation."

The lack of thought in that throw away line beggars belief.

Dr Switkowski, who is a nuclear physicist, said what was happening in Japan was unlikely to occur in Australia.

"We are not geologically active, we aren't in the path of typhoons and hurricanes and tsunamis," he said.

But environmentalists said the problems in Japan proved nuclear power was never safe.

"Japan's nuclear plants were built with the latest technology, specifically to withstand natural disasters, yet we still face potential meltdown," Greenpeace spokesman Steve Campbell said.

I'm sure this face time with the press is all out of a dear love of his subject, but we already have other opinions;

Thursday, March 10, 2011

Taxing subsidised fossil fuels

John Watson at The Age (with help from the Australian Conservation Foundation) points out the meaninglessness of applying a carbon tax to a commodity produced by a heavily subsidised industry. See the original for the final details.

Twelve billion holes in plan to cut carbon
John Watson, March 10, 2011

[Given the current orthodoxy of fee market everything often espoused by Govt and others], why does Australia's government effectively promote fossil fuel use at a cost of about $12 billion a year?

A carbon price, in effect, would already be operating if only government did not feel the political need to insulate energy and road users from demand-driven prices.

Tax incentives to use fossil fuels are so great that their value exceeds forecast revenue from the Rudd government's rejected emissions scheme for years to come. The Gillard government has yet to finalise its resurrected carbon price, but it is unlikely to outweigh the entrenched carbon bias. The $12.2 billion in fossil fuel incentives dwarfs the $1.1 billion for climate policy in 2010-11, and the gap has grown by $1 billion since 2007-08.

The opposition is making wild claims about future power bills based on carbon price guesstimates of $26 a tonne. If all emissions were priced equally - they won't be - the total cost impact would be about $14 billion a year. That's little more than existing tax incentives for fossil fuel use.

It is not carbon pricing but the strain of soaring demand on ageing power infrastructure that has driven up Victorians' electricity bills by almost 60 per cent in five years, even with government price controls and subsidies.

One of the worst [political fixes ever] was driven by political panic in 2001, when John Howard ended indexation of the petrol excise. The bowser price fell all of 2¢ to 89¢ a litre, but the hit to the budget was enormous. Revenue losses have mounted to at least $3 billion and, by some estimates, as much as $6 billion this financial year. In 2001, the oil price had "soared" to $US29 a barrel. It's now above $US100. The near-doubling in the Australian dollar's value from US50¢ to parity has softened the blow, but finite supplies are driving up prices. No political fix can reverse that.

[Politicians] are suckers for compensatory fixes. The biggest is almost $5 billion a year in fuel tax rebates to producers. Much of this goes to the same miners who resisted a fair return to taxpayers on the soaring value of publicly owned mineral resources. How do they justify keeping fuel rebates as well?

Condensate exemptions will still cost the budget $580 million this year, while $1 billion is lost to aviation fuel excise exemptions. Fringe benefits tax concessions for company cars, which create an incentive to drive more, cost $1.1 billion a year. There's no tax incentive to use efficient, low-emissions public transport.

Where is the outrage at industry protection and price distortion? The principle of consumption taxes is the more you consume, the more you pay. Instead, the heaviest users feel less pressure to develop greater energy efficiency or more sustainable sources. The longer we put off this inevitable adjustment, the harder it becomes.

The Australian Conservation Foundation has a pdf with some figures and an interview with ACF Executive Director Don Henry;

Australia spends $11 billion more encouraging pollution than cleaning it up

New analysis shows the Australian Government spends $11 billion more on subsidies that encourage greenhouse pollution than it does on programs to tackle climate change.

Our analysis shows funding for programs to address climate change has increased by about $500 million since 2007-08, but incentives that encourage pollution have ballooned by more than $1.5 billion.

“There has been a lot of good talk about addressing climate change, but unfortunately the numbers tell a different story,” said ACF Executive Director Don Henry.

“In 2007-08 our government spent $480 million on programs to tackle climate change, but then it spent $10.6 billion on subsidies that promoted fossil fuel use.

“This financial year the spending on climate programs is up to around $1 billion, but the fossil fuel subsidies are up too, to a massive $12 billion, meaning the Australian Government is spending $11 billion more encouraging pollution than on cleaning it up.

“The Fringe Benefits Tax concession for company cars is like a virtual pollution factory, invisibly chugging out just as much greenhouse pollution every year as a medium-sized coal-fired power plant – only the fringe benefits tax break doesn’t produce any energy – it’s just a dead weight on the economy, the Budget and the environment.

“We need to stop putting taxpayers’ money into pollution promotion and start investing in clean energy, like wind and solar,” Mr Henry said.

Rio in 2012: Are we sustainable yet?

An Asian news roundup with a focus on sustainability (however defined?) and sustainable energy starting with preparations for the upcoming UN Conference on Sustainable Development in Rio – 20 years after the famous “Earth Summit”.

The Peoples Daily in China bonds with Brazil:

Preparations underway for sustainable development conference in Rio: UN official

The attendees of the 2012 conference will discuss two major themes -- fighting poverty with a green economy and creating institutional frameworks for sustainable development. Three meetings of the PrepCom will be held before the conference begins, in order to carry out planning on substantive and procedural issues of the conference.

Sha said it is "very fitting" that Brazil hosts the conference, not only because Rio de Janeiro hosted a landmark UN environment and development conference in 1992, but because Brazil itself has made great strides in sustainable development in recent years.

"Since the first Rio Conference, Brazil has achieved an impressive track record in growing its economy, lifting tens of millions of people out of poverty, and protecting its environment, " said Sha. "Brazil has certainly shown the world how to put sustainable development into practice."

The UN News room quotes the more urgent words of the Under-Secretary-General for Economic and Social Affairs.

Rio 2012 a chance for agreement on ‘green economy’ to fight poverty

The United Nations Conference on Sustainable Development to be held in Rio de Janeiro, Brazil, next year will be an opportunity for humanity to strengthen its commitment to making the transition to a “green economy” to help lift people out of poverty, a senior UN official said today.

“We cannot wait for another 20 years,” Sha Zukang “The time to commit is at Rio 2012” .

UN Members States have, through a General Assembly resolution, identified three objectives for the Conference – to renew commitment to sustainable development; to identify progress and gaps; and to identify new and emerging challenges.

The Conference’s two themes are green economy in the context of sustainable development and poverty eradication, and institutional framework of sustainable development.

Mr. Sha said he hoped Member States will be able to agree on “green economy as a pathway to sustainable development” and come up with a “tool kit” for the implementation of the principles that they will agree on.

Last week, Mr. Sha cautioned that the failure to tackle poverty can only lead to rising social tensions, ecological pressures and economic crisis, stressing the importance of a transition to a green economy that fosters sustainable development and poverty eradication.

[The] “Earth Summit” was held in Rio de Janeiro, where countries adopted Agenda 21 – a blueprint for rethinking economic growth, better protecting and managing ecosystems and creating a safer, more prosperous future for all.

In the Philippines the Manila Bulletin picks up on the FAO food issue.

'Perfect storm' threatens agriculture in developing nations

HYDERABAD, India (PNA) -- With the Food and Agriculture Organization's (FAO) warning that the world is heading towards a food crisis, coupled with the political instability in the Middle East, which resulted in the incessant increase in oil and food prices, a former agriculture secretary said that a "perfect storm" is threatening the agriculture sector in developing countries such as the Philippines.

International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) Director-General William Dar… said "the perfect storm (is already) converging in the horizon."

"The Middle East situation continues to escalate not only in Egypt and Tunisia. Now, Libya is one big case that will escalate or impact to various countries. Although the contribution of Libya to the oil market is very small, the whole situation impacts into the world oil market,"

Dar said both the increase in prices of food and oil will affect mostly low income earners.

"The government should have contingency plan, there's a need to enhance food production in areas not frequented by typhoons such as Mindanao to increase level of production this year. Mindanao will be key for food sufficiency," he said.

"Organic farming has its own niche in the world food market, it is not bad, but it cannot substantiate to the needs of the country's growing population," he said.

"The millions of idle degraded lands and infertile soils in the rainfed areas comprise an untapped resource for the cultivation of drought-tolerant cereals and legumes for food and feeds as well as biofuel crops that will not compromise food security and sustainability of the environment," it said.

In the Philippines, Dar said, there are research institutes devoted to rice, coconut, sugarcane, cotton, tobacco, fiber and abaca, silkworm, root crops, biotechnology, plant breeding, carabao, fisheries and other strategic commodities "but there is none devoted to rainfed agriculture in general and crops such as corn, sorghum, legumes and important bioenergy crops for food, feed, forage and biofuels."

"At present, rainfed agriculture lacks support. In this point in time, the government should intensify strategies for rainfed agriculture if it attains food self-sufficiency in 2013," he said.

Worries about poor weather have led to warnings that prices of key grains could rise further this year, it said.

Even the development lender World Bank (WB) has said that food costs are continuing to rise to near 2008 levels, when price spikes in food and oil had devastating impacts on the poor.

"Global food prices are rising to dangerous levels and threaten tens of millions of poor people around the world," said World Bank president Robert Zoellick said in a statement.

Also in the Philippines, there is a wild desire down down down where the flames are higher, to develop geothermal.

EDC, WWF forge tie-up to speed up geothermal dev't here and in Indonesia

Geothermal leader Energy Development Corporation (EDC) and World Wide Fund for Nature, Philippines (WWF-Philippines) joined forces to accelerate geothermal development in Asia, starting with the Philippines and Indonesia, via the landmark “Ring of Fire” project. The Ring of Fire initiative aims to replicate the Philippines’ global success in sustainable geothermal production for Indonesia’s largely untapped geothermal energy resources.

The Philippines gets 17 percent of its electricity supply from geothermal power plants and is the second largest geothermal energy producer in the world, next to the US while Indonesia holds approximately 40 percent of the world’s conventional geothermal reserves.

The “Ring of Fire” is in line with and in support of WWF’s 100 percent by 2050 Renewable Energy Vision and has the ultimate goal of increasing installed geothermal capacity in the region by 150 percent in 2015 and 300 percent by 2020. On top of increasing geothermal production, the project will also address issues on environmental sustainability, energy security and climate change.

Given its location and “wealth” of volcanic activity it is surprising that Indonesia does not have a larger geothermal industry: popular press reports of Indonesian nuclear ambitions scare me…

Indonesia - Time to tap the ring of fire

Indonesia, owing to its location in the pacific ring of fire with over 130 active volcanoes has a reserve of nearly 27,000 MW of Geothermal power. Despite having the highest reserves in the world, Indonesia has, so far utilized only 4 percent of it. It has typically relied on oil and gas for energy production. Conditions however, have changed now with Indonesia being a net oil importer, thereby posing a need for greater exploitation of geothermal energy, along with other renewable forms of energy.

Current scenario however seems to be set for a change. Firstly, Indonesian government has started removing subsidies from oil, which would bring geothermal to a level playing field with fossil fuels. As Indonesia became a net importer of oil and suffered from high oil prices, President Susilo Yudhoyono during his previous regime curbed the oil subsidies thereby hiking the oil prices. With Mr. Yudhoyono set to return to the Presidential office for a second term, oil price rationalization is expected to resume, which would increase the competitiveness of geothermal energy.

High risk and capital-intensive nature of business are, however not the only reasons why only about 1,000 MW of a potential 27,000 MW in Indonesia has been capitalized. USA and Philippines, despite having lower potentials of geothermal energy score much higher in terms of the installed capacity of Geothermal power plants. USA has an installed capacity of approximately 2900 MW. Philippines also has an installed capacity of nearly 1900 MW which serves nearly 25% of country's energy needs.

The energy blueprint for year 2025 has outlined the government's plans to increase the share of geothermal energy in Indonesia's overall energy mix to about 5 percent from a current 1.3 percent, along with nearly doubling the overall installed capacity in the country. This would mean that nearly 30% of the additional 30,000 MW installed capacity would come from geothermal energy. Such high growth would present a huge potential for both project developers and equipment manufacturers.

Indonesia is being urged to adopt green development initiatives (my cynical observation is no “gift” no “green” – if you no what I mean).

RI advised to adopt green economic policies

Indonesia should adopt green economic policies to ensure the sustainability of its economic growth, an international meeting on green economics concluded in Jakarta on Monday.

The experts at the meeting agreed that Indonesia should apply green economic projects as an important means to influence its economic activities, concentrating on areas including economic growth, industrialization pattern and regional economic cooperation and integration in Southeast and East Asia.

The meeting`s participants also discussed how enterprises and governments in both Southeast and East Asia countries need to reorganize the development of their industrial sectors in terms of competitiveness.

They also noted that the development of a green economic concept should be preceded by interaction between policymakers and citizens. Green economics was believed to have impacts on energy efficiency, efficient resource utilization, industrial upgrading and diversification as well as on the development of regional markets.

Singapore continues to corner the SE Asian market for research labs.

Solar Fuels Lab Opens in Asia

The new Solar Fuels Laboratory at Nanyang Technological University (NTU) in Singapore is now open. It aims to create efficient and sustainable sources of fuel by developing a device that uses artifical photosynthesis to extract large amounts of hydrogen from water using sunlight.

Current technology requires huge amounts of energy to draw minute amounts of hydrogen from water, but the university is working on a commercially viable solution. For large-scale production of solar fuels the researchers need to find suitable combinations of chemical catalysts to speed up the artificial photosynthesis process while using minimal energy.

Spanish company Gamesa is increasing it investment in India.

Gamesa to set up new facilities in Gujarat and Tamil Nadu

Gamesa, the Spanish company specialising in sustainable energy technologies, mainly wind power, today announced the investment in a new blade factory, nacelle factory and tower factory (joint venture) in India; and also the launch of its R&D centre at Sholinganallur in Chennai. Gamesa’s Indian outfit has also taken a lead role in ‘RePowering’ of existing old turbines with state-of-the-art new Wind Turbine Generators (WTGs), which is the first of its kind in the country.

Considering the tremendous talent pool, knowledge and skill level availability in India, we are planning to recruit more than 100 engineers in 2011 for research and development activities. The capacity will be doubled in the year 2012. This R&D centre will support the global engineering research and development activities, working all through the value chain. The engineers will work on major projects in the value chain including mechanical, aerodynamics, material research and electronics aspects.

In 2011, Gamesa is planning to set up new manufacturing facilities for making Nacelles of 2MW turbines, Blades and Towers (JV) in different locations in the states of Gujarat and Tamil Nadu.

Gamesa India is pioneering the Re-Powering initiative which aims at using the existing wind energy resources on site more efficiently, with technically advanced and high performance turbines. There is a significant potential for enhancing wind power generation in India through the repowering of existing WTGs. As much as 50 to 60% of wind farms in India were installed with first or second generation turbines that are less efficient. Also, these turbines were installed at prime locations with higher wind speed. The first Re-Powering project in India is being executed by Gamesa India in the state of Tamil Nadu currently, with 5 more projects in pipeline. Re-Powering of such old turbines will result in enhanced generation and low cost of power generation for investors, on a life cycle basis.

And returning to China, ABC Radio Australia has an interview reporting that the latest 5 year plan aims to battle inequality…

China's 12th Five Year Plan to battle inequality

Thirty six million low cost homes and new high tech, green industries - they are some of the ambitious targets set by China's latest five year plan. More details of the economic blueprint have emerged during this week's National People's Congress in Beijing. The government wants more people to live in cities and it aims to contain the GDP growth rate to 8 per cent a year. But can it be done?

SNOWDON:There is a heavy emphasis on social justice - an 8 per cent a year increase in the minimum wage, a target of 20 per cent low income housing by 2015. That means building 36 million low income apartments, ten million of them this year.

He says the focus on keeping inflation to 4 per cent and GDP growth to just 8 per cent is important but will be difficult to achieve.
High commodity prices mean Inflation is likely to exceed five per cent.

LIU: Well, I think this could be a triggering effect for social discontent. We know that inflation will hurt the poor the most and we also know China's income inequality has deteriorated quite a lot in recent years.

SNOWDON: The growing gap between rich and poor with the risk of social instability is causing considerable concern in Beijing.
Concern that is growing in the current international context of people power movements.

SUN: The inequality between the rich and the poor, between rural and urban, has widened to such an extent that at the end of the third decade China had become one of the most unequal societies in Asia as well as the rest of the world.

SNOWDON [TO SUN]: So in the past the emphasis was on dealing with severe poverty and now it's that inequality that's the really the target isn't it?

SUN: Yes, that right, to build up so called people orientated and harmonious society that is characterised by so called coordinated and sustainable development. And the social justice agenda has been put back on the agenda but to be able to implement that, to be able to bring up real consequences in material, practical, every day terms for the people is another matter.

SNOWDON: Wanning Sun says the biggest impediment to closing the growing income gap is the continuing existence of the household registration system.
This ensures China's millions of migrant workers, essential to the growth of city based industries, are excluded from most benefits.

SUN: So unless this fundamental system of inequality is somehow got rid of a lot of the policies which aim to bring back inequality are limited in terms of how effective they are.

… all while simultaneously achieving a transition to a more sustainable economy.

China can achieve energy and economic goals: UN

A leading member of the UN's Inter-Governmental Panel on Climate Change says it is possible for China to achieve its economic aspirations without [further?] harsh damage to its environment.

Mark Levine, who also heads the US government's China Energy Group, says China has been devoting attention to energy efficiency and sustainable resources.

Dr Levine has told Radio Australia's Connect Asia program sustainable energy resources and the environment are important issues for China, but the message has not always filtered through to local governments.

He says local governments are often more concerned about economic growth but they have to balance it with environmental concerns.
He says China's economic goals are achievable if they moved from heavy to light industry, and from energy intensive exports to high value added ones.

Well, its a big ask. And for all the (sometimes well deserved) criticism, China recently (but not always) appears to be more effective than some other superpower.

Sunday, March 6, 2011

Grain$ of truth

Updated (8/3/11) news links at end.

Early Warning had a post recently decrying the proposed emergency policy of the Spanish Govt. to increase the biofuel content in their petrol.  One follow up post  then used US data for ethanol production to extrapolate the impact of US production to global food prices.  Thus linking the unrest in North Africa and around the gulf states with the increased cost of food due to biofuels (as indicated by corn ethanol).  But root causes of the increased cost of food are more complex than that.

Stuarts prime beef seems to be with the corn to ethanol conversion: many authors have argued that the conversion efficiency is poor - but it is probably the final act of a greater tragedy. Outside of the Americas, is corn a primary human staple? Even within the US its prime function seems to be as energy source for feed lot produced beef and a major ingredient in the US staple of fast foods (including supermarket ready meals).

While I agree that biofuels may be problematic, lumping all cereal crops together and then assuming that because 40% of US CORN production is going to ethanol that that is the cause of the rise in food prices seems to overly and dramatically simplify the issue.

Various international agencies have pointed out that the rise in GLOBAL food prices is a complex issue, with different causes in different regions.

The Overseas Development Institute has a report out that says (my emphasis added):

Rising food prices: Cause for concern

Policy conclusions
Food prices have been rising since the early 2000s • but spiked in early 2008. Even if they start to decline later this year, the next ten years will see food prices at levels above those seen in the early 2000s, thanks to higher energy costs, demand for biofuels, growing demands for staples as populations grow, and for higher value foods, such as livestock products, as incomes rise.

• Prompt assistance is needed for countries facing surging food and energy import bills and for low-income households

• Low stocks threaten the functioning of agencies such as the WFP and prompt calls for land to be switched back into food production, from biofuels throughout the OECD, and from “set-aside” in the EU.

• In the medium term, economic and agricultural growth can offset the damage, but this will require more determined efforts to boost food production.

• Beyond action, a better understanding is needed of the 2008 price spike, to ensure that such events are rare. Increased variability of weather from climate change makes future price spikes more likely. If more can be learned from the current shock, then dealing with future ones may be easier.

Why have food prices risen so much in recent years?
The prices of staple foods on world markets have fallen substantially in real terms over the last 50 years, with wheat in 1999 at less than a quarter of its 1950 price. Since the early 2000s, however, food prices have been rising. Within the 12 months up to early 2008, the FAO food price index rose by 57%. The causes of these price rises are both short- and long-term.
The former include, above all, low harvests in some exporting countries — notably Australia where drought has hit wheat production — against already low world cereal stocks. Speculation in commodity prices by investors looking for a better option than stocks and shares may also have contributed. Some countries, alarmed by mounting prices, have imposed taxes, minimum prices, quotas and outright bans on exports of staples that have exacerbated world price rises.

The oil price rise also feeds through to the demand side: once oil prices rise above US$60 a barrel – it is currently well over $100 – most forms of biofuel compete with oil and gas, so that foods may be diverted to energy production. This is reinforced by targets in both USA and the EU, and by subsidies to refiners in the USA.

The main effects will of course be on the poor (US not included) where 1/3rd to 1/2 of household income may be spent on food. However the higher food prices may also stimulate reinvestment in farm production, which in lower income countries is labour intensive, thus partially offsetting the effects through increased employment. Thus this report suggests that, yes, biofuels have an impact, but that low harvests, speculation and “panic” (ie restricting exports) all played a part. The politically motivated farm subsidies of the US are a particular problem.

Tuesday, March 1, 2011

What a difference the rain makes...

... a few months of showers, full dams and suddenly, desalination sours.

With apologies to Renee Olstead.

The long Victorian drought encouraged many ideas over the years in the letters pages of The Age, suggesting that if only we built more dams, or a pipeline from the Snowy then all would be well in the Garden State and people could continue to water their roses. Even senior staff members got in on the act suggesting that water from Tasmanian rivers be moved (by gravity) from Tasmania under Bass Straight to Melbourne. Ken Davidson is not alone in apparently thinking that any fresh water that (God forbid) reaches the ocean is a waste - never mind the environment of fisheries in the estuaries. Or the fact that Tasmania was suffering its own water shortage at the same time - so much so that Basslink for a period was not the green electricity supplier to the mainland, but a carbon hungry umbilical for Tasmania. Ken was right about one thing. The desalination deal was probably going to turn out bad for the state of Victoria.

Victorians 'stuck with desal plant'

Farrah Tomazin and Royce Millar

VICTORIANS are "stuck" with Australia's largest desalination plant despite an eventual price tag of $24 billion that is expected to double household water bills over the next five years.

Premier Ted Baillieu yesterday slammed the centrepiece of the former Brumby government's water policy, but baulked at breaking contracts because of cost and the fear of discouraging future investment in Victoria.

''What we now have is a white elephant and a very expensive white elephant and Victorians will be paying for it over the next 30 years,'' Mr Baillieu said. The government released figures indicating Victorians would pay $19.3 billion for the construction of the Wonthaggi plant and its operation over the next 28 years - even if no water is used - and almost $24 billion if the maximum 150 billion litres a year are purchased.

Figures released yesterday ... show that:

■ Victorians will pay about $654 million a year from 2012-13, even if no water is taken from the plant. If the maximum 150 billion litres is taken, the annual cost will be $763 million.

■ In 2012-13 desal water will cost between $5.09 a kilolitre (1000 litres) and $13.68 a kilolitre, depending on the volume purchased. This compares with the current residential rate of about $1.50 a kilolitre.

■ The Aquasure deal commits the government to buy 150 billion litres of water a year as long as Melbourne's dams are less than 65 per cent full.

AquaSure chief executive Chris Herbert said: "We welcome the resolution of this matter and look forward to working with the government in completing and operating the plant in the interests of all Victorians."

I'm sure he did.